The influence of family firm image on access to financial resources in family SMEs: a signaling theory perspective

This study investigates whether a projected family firm image can affect access to financial resources, which is key to providing broader strategic options and meeting short-term financial needs, especially for small and medium-sized enterprises (SMEs). Building on the signaling literature, we consider the family SME leaders’ perspective and conceptually and empirically examine whether they believe a projected family firm image acts as a credible signal to the lender. We also examine additional boundary conditions influencing the family SME’s projected image–access to financial resources relationship, by specifically investigating whether firm age and size alter the degree of the signaling effect. Our unique data on 289 Spanish family SMEs reveal that projected family firm image can act as an attractive signal to lenders, leading to better access to financial resources for SMEs. Furthermore, firm size reinforces the role of the projected family firm image as a positive signal. These findings address an important practical issue in terms of family firm stakeholder perceptions, offering contributions to the corporate branding, family business, and financing literature.

Entrepreneurial Leadership as a Driver of Innovation Success in Family SMEs in Colombia

This chapter aims to analyze if entrepreneurial leadership, regarded as a distinctive feature of entrepreneurial processes, represents an essential element for obtaining satisfactory innovation performance in an emerging context such as Colombia in Latin America. The relationship between entrepreneurial leadership and innovation management works differently in family firms (FF) compared with their non-family counterparts. Indeed, there is no consensus in the literature on the effects of entrepreneurial leadership on innovation success in family small and medium-sized enterprises (SMEs). Exploratory research has been conducted considering a survey held on family SMEs in Colombia. Results highlight the importance of supporting entrepreneurial leadership in order to achieve the innovation goals in these types of organizations and show how these factors change between family SMEs with family CEOs and non-family CEOs. In this sense, although the focus in this chapter is on FF, the conclusions could be to some extent generalized to SMEs.

International Effect on Family SME Financial Distress Prediction

Understanding the reasons of default risk is crucial to avoid the firm's bankruptcy. The purpose of this work is to analyze the impact of internationalization on firm's probability of distress. For it, this chapter aims to propose a model to predict default specific to family SMEs (small and medium enterprises). An unbalanced panel of 10,832 firms over the period from 2012-2018 is analyzed. Ex-ante criteria to classify firms in default or compliant is used. International SMEs have lower probability of default than domestic firms, and compliant firms export more. Results show that export ratio is an important determinant of the probability of default. Moreover, the ratios of liquidity, profitability, size, leverage, efficiency, cash flow, and age are also relevant. Moreover, these ratios explain default risk of both groups international and domestic SMEs. The proposed model has an accuracy of 92.9%, which increases to 95.6% if only export SMEs are analyzed.

Leadership and Sustainability

This chapter on leadership and sustainability from the first to the second generations of SME Ownership addresses both the leadership and sustainability from the perspective of different generations in family SMEs. Because, sustainable leadership is seen as a key factor of the competitiveness in a family enterprise. Without effective and efficient human capital, the SMEs cannot gain the goals such as growth, internationalization and increasing performance. Generational differences in SMEs may improve the creativity and innovation, providing that the established appropriate management system and strategy. From this viewpoint, this chapter provides an overview of generations, leadership, sustainability and competitiveness about SMEs

Entrepreneurial Orientation and Knowledge Management for Succession

Research on entrepreneurial orientation and its relation with family SMEs has been primarily focused on value creation, and not how this value can be generated on the succession process. At this respect, paternalism plays a crucial role in reinforcing family inertia, as Mexican firms are traditional and generally closed to changes. In this chapter, four Mexican family SMEs are analyzed to study how the entrepreneurial orientation of Mexican family firms has effects on both the entrepreneurial performance and the succession process.

A Theoretical Approach Exploring Knowledge Transmission Across Generations in Family SMEs

This paper explores, by adopting a theoretical approach, if and how the knowledge sharing process between the generations involved in business succession is actually accomplished. This paper also highlights the negative consequences of overlooking knowledge sharing process. In spite of existing previous empirical findings, this paper suggests that small firm dimensions and everyday side-by-side working activities do not ensure effective knowledge sharing processes. Finally, this paper also provides insights in order to shift from the 'how' of the knowledge sharing process to the 'why' this process fails, suggesting both cognitive and cultural explanations.

The impact of family harmony on family SMEs' performance: the mediating role of information technologies

PurposeWith the increasing digitalization processes taking place in different industries, the success of family small and medium-sized enterprises (SMEs) appears to be more under threat than for any other types of organizations, especially when information technologies (ITs) are not adequately used and managed. To grow and increase the chances of survival, family SMEs need more than ever IT. Stemming from agency theory, the aim of this article is to understand whether family harmony impacts the performance of family SMEs and to what extent IT mediates this relationship.Design/methodology/approachThe research follows a quantitative approach, based on a sample of 182 family SMEs. Structured equation modeling, through SmartPLS, was employed to validate the research model.FindingsThis study’s main findings suggest that family harmony positively impacts firm performance and that IT governance and strategy mediate positively this relationship.Research limitations/implicationsFirst, the relatively limited number of respondents limits the degree of representativeness of all family SMEs. Replicating the research with a larger number of respondents could strengthen the findings. Second, this study is limited to French firms and future research could extend the findings by looking at cross-country comparisons.Practical implicationsFamily SMEs are encouraged to link their IT governance with their IT strategy in order to increase their organizational performance. A favorable family harmony will make it easier to choose and implement a richer IT strategy and put in place an adequate IT governance function.Originality/valueThis research offers an enriched knowledge of the roles of family harmony and technological innovation in family SMEs and IT contexts as significant predictors of organizational performance. It contributes to family firm theory through the identification of three determinants of family SMEs' performance.